Top Posters
Since Sunday
5
a
5
k
5
c
5
B
5
l
5
C
4
s
4
a
4
t
4
i
4
r
4
Home Q & A Board Other Fields Homework Help Business Accounting
New Topic  
Deprecated Deprecated
wrote...
Go to Answer
Posts: 2784
Rep: 104 0
7 years ago
Polynesia Company manufactures sonars for fishing boats. Its Model 70 sells for $300. Polynesia produces and sells 5,700 of them per year. Cost data follow:

Variable manufacturing   $100    per unit
Variable selling and administrative    $17    per unit
Fixed manufacturing   $290,000    per year
Fixed selling and administrative    $150,000    per year

Arthur Bailey, the sales manager, wants to offer a special sale to a new customer that outfits boats. He proposes a sale of 41 units at a special price of $148 per unit. Arthur believes that it will not affect the company's regular sales in the long run because it is a one-time transaction. The sale will require the normal variable costs, both selling and administrative costs and manufacturing costs, but will not impact the fixed costs. The president of the company has some reservations but finally agrees to make the deal if and only if it adds a minimum of $1,500 to operating income. Based on the president's criteria, Polynesia will not make the offer.
A) True
B) False
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
Authors:
Read 543 times
6 Replies
Replies
Answer verified by a subject expert
Mrgo-breedMrgo-breed
wrote...
#1
Top Poster
Posts: 2227
Rep: 276 0
7 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here

Related Topics

Deprecated Author
wrote...
#2
7 years ago
Makes perfect sense, thx
wrote...
#3
7 years ago
I'm liking this Slight Smile
wrote...
#4
4 years ago
THANK YOU
wrote...
#5
4 years ago
thanks
wrote...
#6
3 years ago
Thank you
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1332 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Related Images
  
 268
  
 49
  
 737
Your Opinion
Previous poll results: Who will win the 2024 president election?